Summary
The Washington Supreme Court held that ERISA does not preempt claims under Washington's public-works payment bond and retainage lien statutes, chapters 39.08 and 60.28 RCW. The court concluded that these generally applicable statutes have only a tenuous connection to ERISA plans and do not provide alternative enforcement mechanisms for ERISA obligations. The court overruled its prior contrary approach, reversed summary judgment for W.G. Clark, and remanded for further proceedings.
Topics
Practice areas
Questions Presented
- Whether ERISA preempts claims under chapters 39.08 and 60.28 RCW seeking payment from a public-works bond or retained funds for unpaid employee-benefit contributions.
- Whether Washington should reconsider its prior decisions holding that these types of state-law claims are preempted by ERISA in light of subsequent United States Supreme Court and federal appellate decisions.
Holdings
- ERISA does not preempt claims under Washington's generally applicable public-works payment-bond and retainage statutes because those statutes have neither an impermissible reference to nor a sufficient connection with ERISA plans.
- The claims under chapters 39.08 and 60.28 RCW are not alternative enforcement mechanisms for ERISA obligations because they enforce generally applicable payment rights against a third party, not rights created or regulated by ERISA.
- Washington may reconsider prior precedent on a federal issue when subsequent United States Supreme Court decisions have changed or eliminated the precedent's legal underpinnings, even if those decisions have not expressly overruled the prior state cases.
Key quotations
“In light of the national shift in ERISA preemption jurisprudence and the persuasive reasoning underlying that shift, we now join courts across the country and hold that this type of state law is not preempted by ERISA.” (at 58)
“This reasoning is sound, and we now adopt it.” (at 64)
“We reverse the trial court’s summary judgment ruling and remand for further proceedings in accordance with this opinion.” (at 67)
Factual background
The University of Washington contracted with W.G. Clark Construction Co. for a student-housing project, and W.G. Clark subcontracted scaffolding work to Paramount Scaffold Inc. Paramount's collective bargaining agreement required it to pay wages and make contributions to several employee-benefit trusts. After Paramount failed to pay $64,905.48 in required trust contributions and later became insolvent, the Trusts and Union asserted lien claims under chapters 39.08 and 60.28 RCW against the public-works project and its bond.
Procedural history
W.G. Clark filed a declaratory judgment action in King County Superior Court seeking release of a lien asserted by the Trusts and Union for unpaid benefit contributions. The superior court granted W.G. Clark summary judgment on the ground that ERISA preempted the state-law claims. The Trusts appealed, and the Washington Supreme Court granted direct review. A parallel federal action was dismissed after the federal district court concluded that the state court's contrary precedent required dismissal.
Remand instructions
The case was remanded for further proceedings consistent with the opinion, including consideration of the Trusts' nonpreempted claims under chapters 39.08 and 60.28 RCW.